NRI Cardiologist Accused of Tax Evasion $16 million
Maryland, October 20, 2005
Ramesh Agnihotri
NRI (non-resident Indian) Dr. Pradeep Srivastava,Cardiologist,
46, was charged in United States District Court in
Greenbelt (Maryland) of tax evasion, which carries
a maximum penalty of five years in prison and a $25,0000
fine.
Srivastava made more than $40 million in short-term
capital gains during 1998 and 1999 by trading stocks
and stock options and tax evasion amounting to more
than $16 million
Read Full Story:
Potomac Cardiologist
Accused of Tax Evasion
Millions From Stocks Allegedly Unreported
By Ruben Castaneda and Ernesto Londoo
Washington Post Staff Writers
Thursday, October 20, 2005; Page B01
By any measure, Pradeep Srivastava was a success
story.
Born in India, Srivastava received a medical degree
in London before moving to Maryland, where he established
a reputation as a well-respected, unassuming, hardworking
cardiologist. He bought a house in tony Potomac and
made more than $40 million in the stock market.
Friends and associates said Srivastava never mentioned
the huge windfall he'd made in technology stocks during
the bull market of the late 1990s.
Federal prosecutors say he didn't tell the Internal
Revenue Service, either.
Srivastava, 46, evaded paying more than $16 million
in taxes by failing to report the millions he made
in stock trading in the late 1990s, according to a
federal indictment unsealed yesterday in U.S. District
Court in Greenbelt.
The indictment accuses Srivastava of three counts
of filing a false tax return and tax evasion, Maryland
U.S. Attorney Rod J. Rosenstein said.
Srivastava, who has offices in Montgomery Village,
Greenbelt and Oxon Hill, appeared before U.S. Magistrate
Judge Jillyn K. Schulze in federal court in Greenbelt
yesterday. He did not enter a plea during the brief
hearing, and Schulze released him on his own recognizance,
which Assistant U.S. Attorney Stuart A. Berman did
not oppose.
Asked whether her client had any comment, Srivastava's
attorney, Paula M. Junghans, said, "You'll see
us in court."
"Anyone who thinks it is safe to evade taxes
should think again, because the IRS and the Department
of Justice are working to find tax cheats and send
them to federal prison," Rosenstein said.
In 1998, Srivastava reported earning nearly $1.1
million, which translated to a tax burden of $406,213,
according to the indictment.
But taking into account earnings from the stock market,
Srivastava made more than $1.6 million that year,
which meant a tax bill of $570,969, the indictment
says.
Then in 1999, Srivastava reported to the IRS that
he had earned $891,535 in income; the tax due on that
was $326,209. But including his stock market earnings,
Srivastava's income for that year was $41.8 million,
and the tax was about $16.5 million, according to
the indictment
Many of Srivastava's short-term capital gains came
from the sale of technology stocks and stock options,
which are the right to buy or sell stock at a certain
price.
For example, in 1999 Srivastava made nearly $2 million
from the sale of America Online stock options and
$457,555 from the sale of Yahoo stock options, the
indictment says.
The value of his stock portfolio peaked in January
2000, around $187 million, prosecutors said. Then
the technology stock market bubble burst, and the
portfolio's value crashed. By December 2000, it was
worth less than $500,000, the indictment says.
Federal prosecutors said disclosure of the full extent
of those losses might have alerted the IRS to Srivastava's
huge unreported short-term capital gains in 1998 and
1999. The first two counts of the indictment allege
that Srivastava underreported his capital gains; the
third count alleges he filed a false tax return in
2000, understating his capital losses.
Tax evasion carries a maximum penalty of five years
in prison and a $250,000 fine; the maximum sentence
for filing a false tax return is three years in prison.
Srivastava, his wife and their elementary school-age
daughter live in a large, white brick, two-story house
in the 9800 block of Bentcross Drive.
According to an online physician quality report,
Srivastava is certified in cardiology and internal
medicine by the American Board of Internal Medicine
and has been subjected to no state or federal disciplinary
actions.
Hector Collison, a next-door neighbor and fellow
cardiologist, said he is giving Srivastava the benefit
of the doubt regarding the criminal charges.
"Cardiology is very demanding. Sometimes he
puts in 16-hour days, like I do," Collison said.
"Sometimes when you get involved in your work,
you leave your personal affairs unattended."
In addition to his three offices, Srivastava practices
at Prince George's Hospital Center and Washington
Adventist Hospital, Collison said.
According to Prince George's County Circuit Court
records, Maryland filed a sales and use tax lien against
Srivastava for more than $29,000 in 2000. That case
is open, according to records.
Staff writer Allison Klein and staff researcher Meg
Smith contributed to this article.
